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tv   Countdown to the Closing Bell  FOX Business  January 23, 2013 3:00pm-4:00pm EST

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liz: full speed ahead for the big tech names. ibm having its best day in years and google repay higher. hello, i am cheryl casone. it is the last hour of trading and "countdown to the closing bell" begins right now. liz claman is on assignment at the world economic forum in davos, switzerland where she is real and the biggest names in business starting with the chairman and ceo of etna, talking about health care spending and impact on the fiscal cliff. wait till you hear what he says about the flu outbreak. and then it is the smart phone revolution. qualcomm wants to the part of a shift toward value funds, particularly in china and other emerging markets. we will get the inside scoop from qualcomm chairman and ceo paul jacobs. stocks near the best levels of the day trading at five year highs. take a look at markets which are trending higher. are you tired of seeing stocks
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go up? look at the dow, higher by 77 points and nasdaq by 17 antaeus and the higher by three points. we will take you through the close. one more hour in this trading day. then there is ibm, best performer on the dow adding roughly 73 points. shares are up almost 5%, more than $9. quarterly earnings beating estimates. big blue also uping its 2013 forecast, stronger demand for services. google, another standout. lifting the nasdaq, internet search giant is up 6% as you can see on your screen, basically going back to the last earnings report in the month of october. google beating street estimates in q. 4, sales of 10% sequentially. costs falling less than some folks third, revenue gaining traction. we were talking about that
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yesterday on the show. also check out apple ahead of q 1 earnings today "after the bell". stock is a trending higher with a substantial move toward the earnings report up 773. we have the numbers as soon as they cross. apple profits made drop for the first time in ten years. not so worried about the march quarter, worried about the march quarter as well. technology is strong, the market higher, let's get to the floor show, traders said the cme group and at the nymex. a couple of big things i want to bring up, investors intelligence and sentiment overall. i wonder if we are getting too frosty. obviously if you look at them they are spread pretty even right now. does that say we will have a corruption? >> right now if you look at the vix sentiment is low, could be a spike lower in equities and there are a couple reasons, zero
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interest-rate environment and the fed has its hand in the demand that is lending things for the lower risk so you'll see more money going to stocks, a lot of cash coming off of the fdic rule that moves into stocks in the first quarter and stocks have another move to the upside. inflation stopped equities but that won't come until the fall. cheryl: let me go to the nymex. jonathan, i want to bring you in because of another big story that is moving is the spread between the brent contract and the w. t. i contract and i am wondering if you think we're seeing a real shift when it comes to how we played these oil contract? >> the shift today was because of the pipeline. there's another bottleneck that is holding wti prices down because of that which caused w. t. i to move lower towards the end of the day and that helped widen the spread. cheryl: will that be the reason to buy wti, not just price appreciation but falling of the
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contract and what we're seeing with regard to oil production in the united states like what is happening in crushing? >> yes. we held a $95 a line and it seems overall be w. t. i fundamental seems strong and the u.s. economy is picking up. it does seem that spread will narrow long term with wti appreciating. cheryl: let me bring in caddy weisberg and bring up correction. you can't help but after the last five years what we have been through the back to 2008 you will. you did begin to get nervous when you see these markets trend higher day after day after day. >> no question, i agree with you. we are probably overbought if not way overbought short term but clearly the momentum, the minds of least resistance are on the upside and we continue to climb, we are in the sweet spot
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of earnings, fourth quarter earnings. on balance coming in pretty good, excellent earnings last night from ibm and google, high tech and in the case of ibm, multinational company and if you go back and look at g e's earnings which is a stock we own and we talk about proxy for a global economy those earnings were terrific and the growth was coming from all the areas, people thought we were getting soft. perhaps it is earnings and perhaps 70 unknowns even if we don't necessarily agree with the solutions but the political -- the line of least resistance made on the upside. cheryl: there could be another factor in all this and that is bond managers trying to chase the benchmark to keep up with their own benchmarks so buying against buying so here we are with another day of a five year high, multi-year highs for diaz and the and the dow.
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>> it presents they changed the ground rules when it comes to trading stocks we entered a brave new world of momentum trading and momentum is king whether it is the upside or downside and momentum is on the upside and you are correct, basically there are a lot of people on the sidelines with a lot of cash that negative, myself included, all through december and simply trying to play catch up, in addition the fed basically is creating a bobble in equities by zero interest rate environment. cheryl: don't fight the tape. all right, thanks to all of you on the floor show, appreciate having you here, six minutes after 3:00 p.m. eastern time and here's the big story happening now. the nation's largest public pension fund has made a big come back. assets under management are back to 2007 levels right before the financial crisis hit and in terms of performance it is having the best year since 2006. where is the california public
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employees retirement system? putting their money to work right now. investment officer joe deer joins me on fox business from sacramento, calif.. i wanted to ask you, your portfolio at this point is approaching 2007 highs. what do you attribute the rise to in particular leading up to the end of 2012? >> we have come back a long way by keeping to our long-term strategic portfolio allocation. have of our money is in equity, 15% in private equity, 17 fixed-income and real-estate exposure hedge funds and from the global financial crisis we face that allocation, as the markets came back so that our portfolio. cheryl: we're looking at a pie chart for your investments are, a big chunk, public equity income in green, 10%,
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real-estate, are you focused more on california real-estate market, are you spreading more across the country, internationally, where is that piece of pie for you? >> the real-estate portfolio which was a big source of trouble in the financial crisis has helped improve our return. real-estate gave us a 15% return in the past year. we are moving our portfolio strategy in real estate from a growth orientation to an income orientation. that includes exposure to u.s. real-estate core real-estate, high quality central business district office properties, industrial properties that captor growth, emerging-market exposure is. not so much europe and real-estate but real-estate is one of the drivers of improved performance. cheryl: i see that in 2012 sternly with real-estate again gaining 13% for 2012. looking forward a couple big issues and stories that came into play in 2012, in particular was you were one of the first funds to make headlines by
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saying we're going to get out of the gun business, we no longer have these positions and gunmakers that make the guns we saw in newtown, connecticut. are you feeling comfortable in that decision and if you get out of that business, what is the new business for you? >> you are a little ahead of us. are board at a february meeting will consider our position in terms of exposure to manufacturers of firearms which are prohibited from ownership in the state of california. is a relatively small exposure, $7.5 million, $250 billion portfolio but our board will make the decision whether we want those holdings. i can't predict what will happen, but selling out a $7.5 million position will not change the risk profile or create a lot of transaction costs. unlike our partners, we did not have a private equity exposure in to the group that
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manufactured the weapon used in the newtown tragedy. we will take a divestment from firearms. what we will do as an alternative when we make the investment is keep it through the regular equity exposure. cheryl: certainly the two of you seem to go in lockup or whatever. i want to ask about something else in 2012 and that is j. p. morgan -- jpmorgan. big exposure to the company when the $2 billion loss it, coppers came out and said he needs to go. how do you feel now? about jamie dimon leaving jpmorgan? >> i think jamie dimon is an example of how managing a corporation is complex as jpmorgan is impossible for the ceo to stay on top of the risk. he is still a very talented executive and i don't think we actually call for his termination. we wanted the company to do a better job with respect to risk.
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the question for other financial giants, are too big to manage? are they so complicated that they need to pull back? a continuing discussion in market reforms or position of the volcker rule in the u.s.? cheryl: it fair to say your position has changed? you have a kinder position when it comes to jamie dimon's leadership? >> jamie dimon is one of the most accomplished executives, financial services, his story with the london whale and $6.6 billion loss in that trade, could make mistakes. the question is what will the company learn going forward? he stepped up and accepted responsibility from that and that shouldn't be a refreshing novelty in government or business but right now it is. cheryl: i had to ask because the decision calibers make and resistance you make are also
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market-moving frankly. joe rear, chief investment officer. we will be watching, thank you for being here. closing bell going to ring, 49 minutes to go. doctors -- you know why -- patients of the flu, i don't know. at night is turning to an interesting source what comes to getting the latest information on the outbreak. liz claman gets the game plan for the flu season straight from the chairman and ceo in davos, some bold statements on health care spending coming up next as "countdown to the closing bell" role on. twins. i didn't see them coming.
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track to say coach is having a rough day would be an understatement. nicole petallides standing by in the stock exchange, taken out of the wood shed. nicole: talk day, the company itself coming out with numbers and the holiday season was tucker than they expected. demand was weaker than expected with these results, you're seeing stock kinking, down 16%
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not feeling confident, so you can see under significant pressure. i put this on my facebook page earlier this morning, someone said coach is out. you can say is directly correlated but when you look at michael corazon for one year it is up 84% while coach over 52 weeks is lower. that really shows the divergence between the two companies, and one other thing coach noted was competition and some of the rivals have been discounting their handbags which cuts into coach's sales. cheryl: thank you very much. coach is the stock to watch. a flu shot may cost you $30 at a local pharmacy but the epidemic currently slamming 47 state could cost one u.s. company as much as $100 million a inhumane own shares of this company.
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liz claman is in davos, switzerland at the world economic forum. liz: a lot of you may own this stock in your portfolio or your 401(k). where do we come of with but $100 million number or more? when the aged 1 and 1 virus came through it cost more than the one hundred million dollars. how did they look at it from a global standpoint? the ceo of etna, thank you for being here. could be worse than the age one and one? >> know. absolutely not. we are starting to see a decline. we watch not only the cdc data but we knew before the cdc report that the flu was going up because we want to google. we saw an early spike. we saw it go down.
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do we see a double spike or see it start to plateau? our normal flu season is $50 million and plan for that this year. last year was 25. will be between 50 and 100 but less than 100. liz: less than $75 million? >> don't know. it won't be a big number. rear betting on medical costs. liz: how concerned are you when you see a spike? when you start to see real outbreak? when that starts to happen wheat -- the bring your chief financial officer and say put together rainy day fund? >> we have every month a meeting with a bunch of actuaries and statisticians and medical management people and talk to them about what is going on in the marketplace? we saw the initial spike of the flu, what we saw was it was low in intensity, people going into the hospital, seeing people just getting sick with the flu and going home. we start to break it down and decide whether we have a major problem like we saw with h1n1
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in 2009. cheryl: a breaking news is how google aggregate's the numbers vice the, city and how many people are coming down with it and do it by whose searches flew. >> we follow google in a number of conditions and the flu is one of them. cheryl: liz: let's talk about grand landscape. why did you come to davos? >> we are global company and like to understand where markets are developing and the need to they have. winnowing china, the 12 or 5-year plan requires more domestic consumption. a big thing the chinese save for its health-care. if we can build a health-care system in china to create a
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safety net that frees up the link to go into domestic consumption. cheryl: to chinese employers pay for health care? >> no. rich: you think that model in the u.s. has to change? >> will change. we will see with the beginning of the exchange that the comes into the mario draghi. liz: employers will start saying can't cover it? >> it is different than that. what is happening is employers had passed off 50% of the increase in health-care costs to their employees. very slowly but surely employees are picking up larger and larger portions of health care. if the trend continues in the next five years employees will be paying as much for their health care as employers are so even if there's -- individuals will be shopping, they will be looking for the best deal and we will have a consumer market place regardless. liz: when you look at how the insurance industry has changed, what do you privately and i asking a of fox business viewers, what do you think we could do this so much better? >> here is the connection
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between the health care system and fiscal cliff. there are $750 billion waste in the system every year, 1-third of the health care economy. that was a report put out by the i o m, a bunch of doctors. if we solve that problem we would payback half the nation's debt in ten years. address of half of it we do what simpson-bowles did with their suggestion, 20% of it. if we fix 20% we fix the acl. the real opportunities to get after that waste. liz: where is the waste? in what form? >> a la administration in the system we need to do better. we adjudicated% of the claim that come in the door. we don't touch them anymore. liz: does stand, approved? >> they go through the system and get adjudicated. we believe we should and have a lot of paper anymore. we have people's id card on their phones. liz: you have dealt very much
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first hand with the health care system. you were in a skiing accident that left you partially paralyzed, dealing with insurance like the rest of us and you donated a kidney to your son. what was the one thing you thought this is not good how this is working with the insurance system? >> the whole health care system. nothing was connected. doctor came and went out of my son's room and my room, nobody could tell me what was wrong, they could tell me what was wrong with my spine or my arm. we tend to break people apart into pieces when we treat them in the health-care system and therefore inefficient. we need to say what the you want to accomplish in your recovery? what do you hope to achieve and develop programs that move you along at path. because the system is so fragmented and the data is not available each actor does their own best thing which in the interest of the patient may not be the best thing. liz: that gave us a real insight into the insurance business and
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the health-care industry. thank you so much. we will send it back to you in new york. cheryl: we will see you in the next few minutes. we now have 37 minutes to go. dell is all the rage when it comes to dealmaking but we may see a flurry of activity in the banks. charlie gasparino working the phones with the latest developments. copd makes it hard to breathe,
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cheryl: the market is buzzing out of the news from dell. soon to be in the financial services sector. the latest exclusively. charlie: i don't think you will see them merge bringing back the old house. you will see, i'm talking to bankers, take it for what it is worth, but usually on the
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cutting-edge of these things, but they're telling me they will be significant deals in the financial services industry and they are pushing them. the reason why, low interest rates. dodd-frank cost, the banks have had to cut cost. what you see is lower trade volumes. put all that together, that is a situation, that is what you have right now in the financial services, that is right for consolidation. regional banks like suntrust, regions financial, could be sold because of those conditions. low retail trading volumes needing ameritrade and e*trade on the block. those are firms that deal primarily with small investor trading. money is flowing out of stock mutual funds, not a lot of trading volume among individual investors. low trading volume plus low
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interest rates with melon and state street on the bank. on the block. when you hear about the euro zone problems, they are bubbling through, that is trouble pushing foreign banks to possibly spinoff their u.s. subsidiaries like the asset management something i have been hearing for months and months now. that's apparently it's one of the names. i'm not saying these banks are in particular in play. bankers at the wall street firms are definitely approaching these players saying you should do a deal. they are listening. when you put it all together, the macro scenario, increased regulations, euro zone problems, low trading volumes, low interest rate so you can borrow
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cheaply, guess what happens. you don't make enough money. when you have low interest rates you don't make a lot of money on your investment. you put all that together and you have a situation right for mergers. i don't know they will merge with ameritrade, but is there a need for two of them right now? cheryl: probably not. they traded higher at 2012 like the big guys did. so many deals going on, they were doing their banking profits, c. can have more power houses, medium-size. charlie: they were in the market to buy something, i heard they were in the market, i can't
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remember the name of the brokerage firm, it is here in the u.s., larry mcdonald, our thkb5áv&: new edge. charlie: thank you. i here they are in the merge talks. there is clearly impetus here to do deals, and we will see that coming very, very shortly. cheryl: money is there. charlie gasparino, thank you very much. we now have 28 minutes to go. you heard of the iphone, droid and samsung galaxy but what is the one cell phone millions are using that you might not even be aware of? we will find out. paul jacobs, president and ceo of qualcomm, that interview is next from davos. look, if you have copd like me,
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adam: i'm adam shapiro with your fox business brief. wall street bankers are pushing deals in the financial services sector as they're telling charlie gasparino telling the dodd-frank expenses will sport a frenzy of possible dealmaking among banks. a source telling gasparino regional banks like suntrust, pnc, regions financial could be sold and merged. kodak plans to emerge from the sea by the middle of the year. receiving approval from a bankruptcy judge to borrow $800 million. that money will be used to put into place the company's reorganization plan in order to emerge from chapter 11.
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the new york knicks have passed the los angeles lakers to become the nba's most valuable team. according to forbes, the average value rose 30% over the past year pushing the team's worth to more than $1 billion. we continue our "countdown to the closing bell" with the woman and always has front-row seats s to the next, cheryl casone at cheryl: yeah, that is me. big sports fan. the world is connected more than ever before today, even at the top. liz claman at the world economic forum at davos, switzerland. liz: paul jacobs, chairman and ceo of qualcomm. we would really be way behind in the smartphone revolution. it is nice to see an american company take a leadership role. what is the one thing you feel you did right in the past 10
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years to bring us to where we are today? >> we really tried to find a vision to get the internet in the palm of your hands. i always believe wireless internet would have it acre impact on the world than the wired internet. liz: what did that look like? the gigantic thing? >> it was a little large, and we did a smart phone somebody told me you could have attacked somebody with that. but back then that is the way the phones were, they were all like that.
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cheryl: when you are at an event like davos, are you looking at the egyptian delegation seeing what phones are they using or the israelis or the russians, what laptops do they love, what tablets are they loving right now? what captured your eye? >> we are in those markets, so i know what is filling in each of these different markets. if you go to developing countries it is the low-end smartphone is selling a lot because we're getting them down to almost $100. that means people can have those phones, that is a huge difference. liz: the huge term is value smart phones. not low-end. there are a lot of companies putting this together. how interested are you in grabbing that piece of the pie? it seems you guys have really crystallized the opportunities in the higher-end smartphones.
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>> we are very focused on the value smart phones also. we have a separate group set up that really focuses on ship chit the low-end, and we also do reference design. we go to manufacture and give them essentially a completed phone and they tweak the software, add a little bit of something special for themselv themselves. these companies get their phones out in a few months. turning, turning very rapidly at that value segment. liz: how much are you hanging around the chinese delegation? expecting to jump 50%, 84% of that coming from the chinese market. >> china is a very important market for us both because the markets domestically, but also because so much manufacturing is being done there now. by far our number one source of direct revenue for qualcomm, so we're very focused on that. i was just there at the supplier
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event, thousands of people listening to what is next for them. cheryl: tell me what phone i've never heard of that you see a lot of people in china carrying. >> to have their own version of steve jobs. an internet this tradition, they sell accessories associated with it, slick user interface, they have tons of followers on their social networking site, that is a company most americans haven't heard of because it is mostly sold in china. liz: everybody remember that. i have looked at all that is happening with investing in money. capital expenditures, you expanded and spend some money in sharp, when will we see it pay off there? >> the money we invested in sharp was for the investment in display technology we have been working on them with. some look at the financial state
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of some of those japanese display companies and say things must be bad. what we know is they have some great technologies so we are providing technology they have with technologies we have and we are hopeful that can come to the market relatively soon. we haven't made a product launch yet, but that will come relatively soon. liz: what is the number one question you would love to have answered? that would help you rush ahead with your company's growth in 2013? >> i really want to know the u.s. government can solve our fiscal problems, if they can reform the corporate tax so the money earned outside. we have $18 billion outside the united states that could come back to the united states, but corporate tax doesn't work that way right now. i would love to see territorial tax system, tax reform and get us through the fiscal problem we have right now. liz: what about a tax holiday overseas?
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>> if they do that, that is even better, but i will not hold my breath for that one. liz: paul jacobs, thank you very much. chairman and ceo of qualcomm. back to you in new york. cheryl: there is still more to come tomorrow from davos. liz will interview coca-cola ceo and kenneth frazier, chairman and ceo of merck. two prominent leaders we cannot afford to miss it. when i have 60 minutes to go. we're counting down the minutes until oh, you know what, apple earnings. big. will the numbers get th the docr decided again? shibani joshi will break it down for you coming up next read axiron, the only underarm treatment for low t,
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i have obligations. cute tobligations, but obligations.g. i need to rethink the core of my portfolio. what i really need is sleep. introducing the ishares core, building blocks for the heart of your portfolio. find out why 9 out of 10 large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal.
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cheryl: here is your fox business market check. i want to take a look at shares of disney right now. look at the stock, up more than 2%. a lot of news on these guys crossing. crossing at an all-time high with news from the upgrade to buy from neutral. $63. as you can see on your screen. taking on the previous all-time high back on september 25. reporting earnings february 5. robert iger taking that company. advanced micro devices hitting a pop for the release of the quarterly results. nicole petallides on the floor of the new york stock exchange. earnings, earnings, more earnings. nicole: that is right. earnings season can move these stocks.
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moving 10%. coach selling off 10%. let's take a look at advanced micro devices. sitting at $2.73 per share. off of the fourth quarter. they have done some cost-cutting, modified partnerships, some weak demand for the computers. however, raymond james one of the banks liking what they're seeing when it comes to advanced micro devices saying the street will ultimately conclude that amd is not going away anytime soon. also seeing some short covering under way as well. cheryl: thank you very much. we will see you in 10 minutes when the markets to close. after reporting earnings after the bell tonight, everybody waiting to see if the tech giant can come back after the disappointment. shibani joshi joins us with what to watch. i'm actually nervous. this is going to be a crucial number for these guys.
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>> this is a big one for these guys. a lot of people on the street, in fact investors are nervous as well. there is a fear gauge measure in the same way the fix measures fear of the overall market, there is an apple vix. it is at the highest levels since we have seen since april. anticipation is high all across the board. here is the line in the sand apple has to jump over in terms of unit sales when it comes out with its numbers after the close today. looking for the company to sell for between 47.5-53 million iphones. 23 to 25 million ipad. we already got a pretty mary indication that we think the iphone numbers could become very strong from verizon releasing earnings yesterday and said it activated 6.2 million iphone units, more than
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expected. but there is a hitch here. a low entry point for people coming in on an iphone that quite honestly never had the ability on the verizon network before. it is a price point issue for customers. what he always said is less than half of the activations were iphone 5, meaning the majority of new phones activated at verizon were for older models. by price conscious customers. thait has the ability to impacte topline revenue number even though the unit sales may come in, the revenues could get a little squeeze. the other factor we are looking at, cab location. the company released the ipad mini. we will not know in the unit sales number but the revenues will give us a picture of that. last but not least, the china story. china is s still important to apple in so many technology
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companies. 12% of sales, they did not get the iphone 5 until december and the ipad mini just came out last week. it will not be rolled into the numbers so lots of asterix associated with the numbers coming out. it is going to take us a little bit to figure that out. cheryl: to let everybody in on conversations in the hallways of fox business it has been all about the ipad mini and the cannibalization is what we have been talking about. we're all about these earnings coming up after the bell. don't move, you can't go anywhere today. complete coverage of the big earnings today. apple, sandisk, western digital coming in after the bell. sandra smith and david asman will keep you up-to-date with technology results. we now have about six and a half minutes to go. our trip to davos continues.
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our hotel operations, we will hear from president and ceo of marriott international. and ceo of hilton worldwide. shares of one company popping as some analyst are cheering. oh, canada. next.
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♪ [ male announcer ] this is karen anjeremiah. they don't know it yet, but they' gonna fall in love,
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get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade. cheryl: checkout shares of safeway. up more than $1, a gain of about five and a quarter percent. this boost coming as they suggest the company should consider selling its canadian assets as part of a plan to rearrange all of its assets. good idea, right?
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predicting the canadian branch website a bidding war and is worth more than $5.5 billion. so there you go, shares down about 12% over the past year, so safeway is the stock to watch but a lot to watch after the bell. david asman and sandra have a lot of names coming up. david: we will see liz coming in reporting from davos but the news coming in. probably the biggest report apple has ever issued, this could affect not only stock price today, for years to come based on whether they hit numbers. sandra: the s&p 500 will be dependent. david: don't forget netflix coming in. nicole petallides, let's start with apple. is there a consensus that if apple misses this time this could be mth


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